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tv   Your Money  CNN  March 6, 2011 3:00pm-4:00pm EST

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states are in budget battles, unions fighting back and unemployment around 9%. coming out, ali velshi will hash it all out. your money starts now. march madness has officially arrived. welcome to "your $$$$$." federal government spending is on life support, barely avoiding a shutdown with a two-week extension. some states facing budget crises of their own leading to angry protests about the future role of unions in america. and throughout the world uprisings in north africa and the middle east sending oil prices surging. stephen moore editorial writer joins me now. one issue at a time. >> okay. >> when these protests in state capitols subside, will unions, which have been weakened over the last 30 years in america, will they come out stronger or
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weaker? >> well, i don't view this as an assault against the unions but i do think this is a really important fight for the future of finances of state and local governments across the country. one of the things i try to tell viewers is this isn't just about wisconsin. what's happening in madison. this is about what is likely to happen in many, many states if they don't get their public pensions and their public health care under control. and so i think the stakes are really high here, ali. i think in the end that these legislators are going to do the right thing. >> sorry, do the right thing, do the right thing, you mean go ahead with these plans that some people call union busting? >> look. i think the most important thing is you've got to get these expenditures under control for these public sector -- the benefits. there was a study that just came out this week by more liberal economist than me that says these are the unfunded liabilities of the health care and the pension benefits of
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public employees at the state and local level, closing in on $2 trillion. that's a big number. what it means is if we don't do something about it, a lot of the money that should go for roads and for the schools is going to go to retirement. >> stay right there. an economist more liberal than me, thought that was a cute line. two things going on here, number one, the stuff steven was talking about, underfunded pensions, liabilities, the other one is the fact we've had this recession hanging over us. while the federal government is still struggling to get its budget together, some of these things happening in states are a direct result of the fact that these states are getting less money from the federal government. >> absolutely, but can i just quickly respond to steve's points? he won't be surprised that i disagree with his conclusion. so he's absolutely right. yes, of course, states have to get their budgets under control and that is a huge issue. but it's also absolutely clear that in wisconsin a republican
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governor is using this as a pretext for beating up on the unions. and there are two pieces of evidence for that. one, how come the policemen and the firefighters who happen to vote republican are not part of this limitation on collective bargaining? and second, you spoke, stephen, about the need to get the budget under control. for sure, but the unions had made the concessions on the money. so why is the governor pushing so hard on the collective bargaining? that's not about money, that's about politics. >> we're going to hold on the answer to that one. we'll talk about what part of what's going on in washington is affecting madison and every one of these states. >> so what's going on in washington is exactly as you said, washington has less money and that means it's giving less money to the states. and that's about the economy being still incredibly weak. >> let's joe quinnen, a human columnist at "the wall street journal." when it comes to the threat of a government shutdown in washington, it's actually kind
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of tough to tell the democrats apart from the republicans. let's listen to a republican and then a democrat. listen to this. >> our goal is to cut spending. we're listening to the american people. they don't want the government shut down, they want us to cut spending and that's what we're going to do. >> two week stop gap solutions only delay the adult conversation we need to have. this is a stalling tactic by house republicans because they're unwilling to enter into serious negotiations. it has grave consequences to doing business. >> okay. so both democrats and republicans say they want to deal with deficits, they want to create jobs, both sides say it's the other side that's causing the problems. joe, is anyone in either party anywhere in america, pick another party if you'd like, capable of displaying the type of leadership necessary to propose what are going to be politically unpopular cuts in spending and possibly tax increases? >> yes. the leadership will be provided by the president of the united states, and it will start being
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provided the first wednesday in november 2012 as soon as he's been re-elected. he's not going to touch that trip wire. he's going to let the republicans hang themselves on the social security issue. he's not going to go anywhere near it. as soon as he is re-elected he will provide the leadership that only he can provide and for two reasons. one, he's the president of the united states, and in most cases jimmy carter being the obvious exception, that man is strong enough and charismatic enough to provide leadership. and the second thing is the republicans don't have a leader. the republican -- john boehner is not a charismatic person. mitch daniels, we we'll see christie, too abrasive. obama has the personalty to provide the leadership we need and he'll provide it one day after he's elected. >> where does the conservative fiscal leadership and the republican party leadership come from on this issue?
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>> first of all, i actually agree with that entirely. look, i think there's no question republicans don't have the charismatic leader that the democrats have. barack obama is a great communicator. there's no question about it. but on this leadership issue, is it leadership for the president to put out a budget that says we're going to lead for the next ten years all of these government entitlement programs exploding, social security, medicare, medicaid, on automatic pilot? i don't see that as leadership. listening to you all talk i think about the song from annie, tomorrow, tomorrow, you're always a day away. when will we finally see presidential leadership? because until we do see that, i don't see these big entitlements being tackled. >> what's your view on this? >> actually, i'm with stephen here. i think the whole debate between now and 2012 is angels dancing on a head of pins. it's but a tiny percent of the budget and it's wrong to talk about entitlements, no one is talking about health care. the only other thing i would say is, you know, the president did
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try to take on health care and he didn't get a lot of help from the republicans. and that is the big thing which is driving all of americans. >> hold on, wait a minute, you got my blood boiling on that. >> good! >> how is it, we know that medicaid is going bankrupt, and what the president did was add 30 million more people to -- you don't put more people on board the titanic and that's what we did with obama care. >> hold on right there. we'll continue this discussion, which extends well beyond our conversations, well beyond our borders, because of the uprising taking place through north africa and the middle east. why is the unrest over there going to mean a sharp rise in the prices you pay for a lot of things? i'll tell you on the other side. [ female announcer ] sometimes you need tomorrow
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oil prices soared to prices we haven't seen in 2 1/2 years. gas prices continue to follow. oil is hovering around the $100 a barrel mark. the spike comes as violence in libya spreads concerns about further disruptions in the region. there have actually been very few disruptions to oil at all. at what point does the unrest in the middle east and north africa send oil and gas prices to highs that could actually start to threaten this very fragile recovery that we've got going on around the world? >> at this point, no. i think the oil price is already, you know, the recovery, as you said is fragile, and this is really going to be a shock for america i think it shows yet again that postponing problems does not solve them. if america had imposed a higher gas tax when prices were lower the country would be in a much better place to deal with this. >> the average price for a gallon of gas this week shooting up, topping $3.45 a gallon.
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but we've heard from people across the country, we've got pictures, our camera men have pictures of gas above $4. the downside to $4 a gallon gas and rising energy prices, that's obvious. we pay more. but rising energy prices are the only way, according to some people, that we are actually going to lower our dependence on imported oil. >> make up your mind. for once and for all. every since months we go through this. every time the price of gas goes up, we say we're going to get serious about energy efficiency, we're going to go up to canada, get all the stuff, the shale and everything like that. then the prices go down and we completely forget t make up your mind what you're going to do, once and for all. once the price gets $100 then we start doing the research, down below our basements looking for oil. >> absolutely right. >> then they lower the prices and it's a trick. they keep -- they have get inform $101 we get serious, they lower the prices. we have to get serious once and for all or stop having the conversation. >> i'm curious as to where you fit into this stephen on oil and energy prices. >> well, look.
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i think the higher oil prices and higher prices when you pump at the gasoline pump, those are like a tax on the american consumer. so there's no question that's going to hurt this recovery. the good news is we've got a great jobs number this weekend, so i think we're seeing a big pickup there. but look, i've been saying for 25 years, let's be drilling, let's drill for all of our natural resources that we have in the united states. we should be drilling in alaska, we should be drilling -- >> the bottom line, it's not enough. it's not enough. we are not increasing the price of oil in america, it's china and it's india where they're -- our demand is flat. it has been for a long time in the united states. >> let's talk about natural gas. we're finding so much natural gas, i'm convinced natural gas is the fuel of the future. and we have a saudi arabia full of natural gas. >> you're right but we're not really doing anything. >> i agree. we agree. we've got to get at it. we've got to get at that natural
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gas because that could be a substitute for oil. >> all right. stephen, what can the republicans do right now to make sure that voters don't add rising gas and energy prices to their list of grievances? >> they're going to. there's no question about that. this hits every one of us at the pocketbook and it's not just gasoline prices. you saw what happened last week with food prices. those are rising, $3.50 for a box of cheerios now. we're seeing that by the way, airlines just declared this week they're going to raise their prices. so i'm worried about inflation, and that's a tax on american consumers. >> joe, is this an ivory tower conversation we're having? are people out there thinking there's a recovery or are they thinking the economy sucks? what's going on? >> the economy sucks. i personally am willing to spend 20 cents extra for cheerios if it will get rid of people like gadhafi, but i take public transportation. if you're out in the midwest, if you're out in the west and you drive a lot, you're feeling this now and you're definitely not feeling the recovery. if you've got kids who have never even seen what a job looks
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we first met chris gardner when his remarkable story of homelessness to ceo was portrayed by will smith in the movie "pursuit of happiness." >> chris gardner. how are you? good morning. chris gardner. chris gardner. good to see you again. chris gardner. pleasure. i've been sitting out there for the last half hour trying to come up with a story that would explain my being here dressed like this. >> okay. i'm sure you've all seen the movie. what an inspirational movie. today we know chris gardner as the ceo of his own brokerage firm, author of "start where you
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are, life's lessons in getting from where you are to where you want to be." chris is with us now. chris, good to see you again. pulling yourself up by your boot straps and doing it well, you tell the story of how you've succeeded. i've got this chart, goes back inform 1917. we've divided it up. the red line is the top 5% of wage earners in the united states. the blue line, everybody else. 95% of americans. take a look at this. from 1917 all the way now to 2008 and a little bit beyond, wages for 95% of wage earners in the united states have been stag stagna stagnant. take a look at the top 5%. they weren't that spread out in 1917, but take a look at what's happened over the decades, particularly in the last 20 years how they've shot up. basically the rich have become richer while the working stiffs
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have stayed pretty of the same. what is the first step for somebody in that blue area in america right now who says there's this great america that has been doing so well, continues to do well, but i'm stuck. i took a step backward because of the recession, and i can't get out of it. tell me what you say to most of america. >> i would say to you what i -- where i was. at my lowest point, living in a public restroom with my 14-month-old son tied on my back, i had to ask myself some very difficult questions every day. and the most difficult question was how did i get here? the answer was, i drove here. i had something to do with the circumstances and conditions that have become my life. and there was something very empowering about that. because once you say, i drove here, the other side is, well, if i drove here, i can drive out of here. >> so you're saying there's a way out of it. >> that's the first step. >> christine romans hosts "your bottom line line," she joins me each week.
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christine, we have been in a recovery, a recovery. they said the recession ended almost two years ago now. why doesn't it feel that way for so many people from whom we hear? >> because the bottom line of that chart, those people are more likely to have their wealth tied up in two things that have not recovered very well. your house and your job. and those are the two things that real people really care about. if you're going to build wealth and you are part of everybody else, the 95%, that's where your income is coming from. that's where your savings and investment is coming from, your house and job. jobs slowly coming back. >> you bring an interesting thing, and i want to bring chris into this discussion. you said something, because i know you know it really well, so you sort of said it in passing but i want to stop you and talk about you build wealth. because regular people who have bills to pay have trouble building wealth. let me show you this chart. i want to break it down by race
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for a second. 49% of whites, aerd doing to "the washington post," kazer family foundation and harvard university, 40% of whites hold stocks, bonds or mutual funds. one half of that proportion, 25% of blacks, 16% of hispanics do. chris, you're a stockbroker. you wanted to be a stockbroker. this is what you got into. what does that statistic say to you? >> that says to me that african-americans are the minorities and just all americans right now, all americans, this is a time for all of us to become a lot more engaged in our own financial literacy, our own role in preparing for our retirements, and becoming a lot more active in, engaged in, and own being the responsibility of knowing. what that means is, especially in some communities, the discussion of the stock market, the discussion of the economy has got to be dinner table conversation. and i'm telling you, i believe this is going to happen. >> if is probably in our families, but christine, i interrupted you because you were talking about wealth building.
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there's a whole segment of american society that is not engaged in wealth building. >> right. and when you look at the top line of that are the cha, to keep going back to that shocking and fascinating chart, i mean, what you think, and i think you and i have talked about this, the people on the top of the line are passing something on, so there's some kind of comfort and some kind of a starting point for the next generation. and if you are in the bottom, and you don't have a house, you are holding on to a job for dear life, you're not invested in the stock market, you're not passing anything on, you're not passing -- you know what i mean? it just becomes a self-fulfilling staying afloat is what you're trying to do and a lot of america is trying to stay afloat even as we're the richest country in the world. >> you were living in a bathroom with your kid, we hear about a group called the 99ers.
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they're done with unemployment benefits. they've been unemployed for more than 99 weeks, their benefits have run out, state benefits have run out, some of them are going to friend's houses and living or living in their cars and trying to get a job. statistics indicate that people do not like to hire people who have been out of work for a long time, who maybe don't go to a job interview dressed properly for it or feel they're engaged. that was you. >> you know i think a lot of people are going to have to begin to realize is first of all, this is indeed showing itself to be a jobless recovery. >> yep. >> and a lot of those 99ers, they have skills, talent and expertise that they're going to have to transfer into owning their own businesses. there's going to become a rebirth in the entrepreneurial spirit in this country that i believe is going to be the missing leg on the stool called a recovery. the jobs are not going to come back. and let me say this, you mentioned something earlier about technically the recession is over.
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>> right. >> the only people saying that have jobs. they're economists. >> i hope you're right about the entrepreneurship. one of the stories we've been covering as well, there are companies putting out job applications saying we will only consider you if you currently are employed. the unemployed need not apply. that is happening, the eeoc, the government is investigating it. so you're right, it might be entrepreneurship might be the only thing that will get somebody employed. >> when you think about microfinance and things like that, chris, giving people small amounts of money to start small enterprises, maybe that's the kind of thing we'll have to start to see here in america, where unemployed people can start small enterprises. right now, you don't have a job, you're not able to keep your house, you're not getting a loan to start a business. chris, thanks so much. always a pleasure to see you. come back, and christine, hang out where you are.
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>> the new american workforce will have to go two specific things in order to succeed, and i'm going to tell you about what those two things are and how you can be a part of it, next. "i better start doing something." we open up that box. we organize it. and we make decisions. we really are here to help you. they look back and think "wow. i never thought i could do this." but we've actually done it. [ male announcer ] visit ameriprise.com and put a confident retirement more within reach. just got more powerful. introducing precise pain relieving cream. it blocks pain signals fast for relief precisely where you need it most. precise. only from the makers of tylenol. [ female announcer ] wake up to sweetness with honey nut cheerios cereal. kissed with real honey. and the 100% natural whole grain oats can help lower your cholesterol. you are so sweet to me.
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you know, every month we get this unemployment report, and every month christine and i have some kind of a bit of an argument, is it half full, half empty, good, bad, we didn't argue this time. >> i know. >> the job numbers came out on friday and we didn't argue. we embraced. we actually both thought that it's -- it was great. the unemployment rate went down a smidge. you and i don't really concern ourselves as much about that, but we created a number, 190 thousand jobs in february in the united states. and we liked that. >> we liked that and liked the private sector job creation was 222,000. the unemployment fell, it's all in the right direction. the fast of in 28 years. but before you get too excited about what's happening right now, with he really need to be talking about where this economy
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is going. what kinds of jobs are going to be created. because you can sit around forever waiting for these numbers on this wall to -- >> 8.9%, national unemployment rate. before all of you start tweeting me and telling me, no, it's double that, there's all these people unemployed, you're right but this is what the government puts out. it probably is 16%, or 17% when you count everybody in. we added 192,000 jobs in february, actually 222,000 jobs in the private sector which is where we want them to come from, but we lost government jobs. >> that's going to keep happening. >> that's wisconsin, indiana. that's ohio. >> that's what you see in the state houses. that's going to keep happening. >> this is the now. >> that's the now. you could sit around forever waiting for these jobs to give you have the job of the future, but we know that new things are coming and that your skills need to be a little different for the next ten years. according to career builder, they put together three different kinds of areas. it's technology, it's medicine, it's environment. in technology, think cyber security specialist. think social media manager. think mobile applications developer. anything that has to do with
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software and the brainiac kind of stuff that we're using on our pdas. >> that is an area you can move into midcareer. we're going to have to change jobs midcareer. for those long-term unemployed, that's an area you can go into and some of your old job experience could transfer over. >> in medicine, information technology jobs in medicine, all different kinds of jobs in electronics record management, coders, lots of things. andrew ruben says they're going out there and trying to train people, liberal arts people, on some of these medicine-type jobs because they have so many things going on there. and environment, think organic farming. it's booming. wellness. all kinds of wellness professions, and that's also in environment. sustainability managers. >> new energy. all these kinds of things. >> there are new things happening and there are new kinds of skills valued over the next ten years. >> the new american workforce is going to have to be two things, it's going to have to be mobile, diane, and it's going to have to be dynamic. we constantly talk about that.
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how do we make this not an ivory tower conversation? how does our viewer figure out how to be mobile and dynamic? >> well, i think the hardest issue is the mobile side. the dynamic side is education, which is difficult because we're split in this country between nose educated and those who are the no, those who get the jobs and those who don't. but on the mobility side is but is your house under water, can you sell your house, can you move. that is one factor that has held back the recovery. because we are creating, we have a lot of jobs unfilled because people can't move to where the jobs are because they're stuck. one of the things that's really changing and this needs to be really thought about is that rents are now exceeding the marginal costs of home ownership in many areas. if you're in one of the conditions where you could rent your home out and move and rent something else that might be a way for you to take a job some where else. i think that's very important. you see it in the reality tv. it used to be flip that house. now it's income property. ways to make money off renting, part of your property out.
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that's a very important thing for people to be thinking about, especially as they're trying to manage mortgage payments that might be under water but they don't want to default on it. and ruin their credit rating. >> the old american dream was the house with the white picket fence now the american dream may be the house you can definitely rent out and move somewhere else. >> that you can rent out, exactly. >> and maybe make some money on it. >> exactly. and we are actually seeing in many, many of these markets because the rent -- we haven't built a lot of apartment space. people want to live in a home, they've lost their home, so there is opportunity there and we have to rethink that as americans for the american dream as we've been talking about already. changing quite dramatically. maybe it was a dream more of a myth anyway. >> the best thing we can do for people and i'm going to talk to freed zakaria about this, but i'm also wanting to talk to author of "the great reset," these are guys who get their mind around the fact that success will come from re-evaluating the world in which we live in. that is everybody's job, richard. it's the job of the long-term unemployed, job of the people
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happily employed right now, it's jobs for christine and me, to think about what will our next career look like. it is a tough sell for americans but what does this mean? you have talked a lot about a mobile work force. what does it mean for you? >> first, two other big things of good news and i agree with you. that big unemployment rate, the one that captures everybody is down 2%. and the one for the least skilled people in the country without a high school degree, that unemployment rate went down 4%. so those are, i agree with you, this is good news, it's not perfect news but it's better news. now, what we have to do to get people moving. we're going to create more jobs 15 million jobs over the next decade, and we take everyone who is going to change jobs, move from one job to another, we're going to create 50 million new jobs. many of them are going to be high-skilled knowledge work, about half. the rest are going to be lower skilled serve its work. the skills we need is not just a college degree. 75% of those with the knowledge
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jobs do have a degree, but 40% of people working in knowledge jobs don't. the two skills that americans need to get in addition to being mobile and moving to where the work is, it's not just a good analytical mind and high grades, we've got to instill how to sell things and market companies and market themselves. every american has to think of themselves and their family either as a startup business, or if you don't like that, think of yourself as a nonprofit and develop a strategy for being flexible, mobile and dynamic, but sales and marketing are the things to instill in people. >> very interesting to say that, because chris gardner from "the pursuit of happyness" says we need an entrepreneurial spirit for those without work, and far fareed zakaria says we're going to have to sell ourselves in that way. so i think this is exactly where we have to be. diane, without severing the link between company-sponsored health insurance and the employee, because that is why so many people stick to their jobs, that's different where richard
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is in canada. is it possible to create a truly dynamic and mobile workforce? >> well, short answer is no. people, health insurance is one of the primary reasons people stay where they are. it's one of the primary reasons people don't get divorced right now when they want to get divorced because they need to keep their health insurance. these are issues that are very difficult. it's one of the things america is known for, its mobility, and now this is working for something against us. we'll have to see more portable health insurance. we'll have to see a lot of changes, but i want to underscore something richard said. it's very important this idea, it's not just the college educated, i think it's a real myth our american workers are not skilled or don't have a set of skills that are marketable. they just have to rethink about packaging them. being a dyslexic myself, the bottom line is there are very intelligent people, it has nothing to do with intelligence, at least i believe that, this is tapping into people's inner strengths and redefining ourselves and being able to redefine yourself in this labor
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market over and over. >> the idea of reinvention. you started this conversation by showing me the jobs of the future. we have a bit of a problem, though, because it's about preparing people to train for the right kinds of jobs. how often do you and i talk about the fact that our high schools don't do that? >> we have 2,000 dropout factories in this country. how are kids in those schools going to be prepared for the jobs i've told you about? one of the many things, the big thinkers have given up on the middle class jobs you don't need a college education for, manufacturing. what are we going to do in its place? not everybody is going to be a mobile apps developer or engineer. so what makes me sad kind of is we're talking about the big think issues, the workforce of the next ten years and a lot of people aren't ready for it yet. >> i hear you but we don't have any more choice. we don't have a choice. every american does not have a choice to not think big. that's the problem. there are no solutions for a future of high school educated
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people. >> a globalized economy is moving faster than american families can keep up and that's why i can be sad but still look to the future. >> i'm with you. i am sad but we have to move along with everybody else and we'll continue to try to give our viewers the best information we can about trying to sustain this american dream. it is, as christine says, it is on life support. can we revive it? i just mentioned fareed zakaria has more than a few things to say on that issue. he's here next. to an hour to an hour just to eat or drink. i've got time to kill. yeah right! i'm a working woman. and i'm busy. why should osteoporosis therapy disrupt my morning routine? with new atelvia there's no wait. unlike other osteoporosis medicines... atelvia has a delayed- release formulation... so you can take it right after breakfast and help protect your bones. do not take atelvia if you have esophagus problems, low blood calcium, severe kidney disease, or cannot sit or stand for 30 minutes. follow all dosing instructions. stop taking atelvia and tell your doctor if you experience difficult or painful swallowing,
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joining me now, fareed zakaria, host of "gps," he's thought a lot about the future of the american workforce. his special, restoring the american dream, airs this sunday at 8:00 and 11:00 p.m. eastern time right here on cnn. earlier in the show we were speaking about the need for a more dynamic and mobile workforce in america. it's something that you've thought a lot about. what does that mean? i often when i say it on tv or discuss it, i have viewers send me messages, what do you mean by a mobile and dynamic workforce ? >> it means a bunch of different
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things but the first one it means is you've got to be willing to physically move. americans are pretty good at that. not right now because of the housing problem because a lot of people have mortgages and homes they can't sell. mortgages that they can't service or they can't leave. but perhaps the larger part of it is we need to acquire skill sets rather than thinking about being cogs in a large machine. a lot of americans have thought of themselves as works up that machine, all good stuff, it used to work very well. but today what you really have to think of yourself as somebody who's a skill based entrepreneur who might today be working at ford, tomorrow may be at an auto parts company, third may be actually starting his own company that deals with some of the same issues, and you're probably going to move jobs ten times in the course of your life, and you've got to be able to have the skills that allow you to move around like that. >> so the mobile part is mobile, the dynamic part is that this is going to be things are going to change. circumstances are going to change. you write a lot about it in "time," you write about it in this issue as well. the idea of outsourcing.
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it has become a dirty word in america. you think that it's a misrepresented term or a misunderstood term. >> well, it's just such a dominant reality now of the way in which we do business, because you have these global supply chains. in effect people make stuff all over. ge jet engine is made in 22 different countries. so when people talk about outsourcing, companies aren't really doing outsourcing anymore, what they're doing is investing in their operations in china, india, brazil or indonesia and not investing as much in america because he get more bang for the buck there. >> right. >> it's not like they're physically moving jobs overseas, it's that they're growing their operations in these places. so understand that's the world you live it, take advantage of it. let the low cost commodity stuff, the making shoes go there. keep the high value added stuff, designing stuff, and you take advantage of it. if you think of yourself as entrepreneurial, you ask yourself, okay, i'm going to try
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to manage the stuff that's going on in india, china, brazil and what can i do? what's left for me to do here? if you don't think in those terms it's going to happen. >> one of the things, what we used to call the first world or developed world had that the developing world didn't have was that a broad middle class and a greater sharing of wealth. now i know you like the numbers as much as i do, you can look at this a million ways. you can see the bottom 95% of society has not seen much increase in their wages. has not seen much increase in their wealth. yet the top 5% or 2% have seen that. so when you say how do i take advantage of what's happening elsewhere, what's left for me, how do my viewers think about this? they know jobs are elsewhere. they know that the economic power of the world is shifting elsewhere. what is the best way for regular americans to take advantage much these shifts? >> education, education, education. and it's not an education that stops with a college degree. it's learning new skills,
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training yourself. i'll give you a simple example. almost anybody in america who knew how to speak chinese is going to find themselves powerfully advantaged because they will be able to manage supply chains dealing with people in china, they'll be able to do all kinds of stuff. that's just one example. it's something you can do as an adult. it's tough, but then there's stuff relating to software, world processes, but ask yourself how you do something that isn't going to be commoditized. in other words, if you're in a race against a chinese worker or indian worker making cents on the dollar, you're not going to win. if you're in a race where you say i'm going to do something fancy, complicated, look at germany. germany has managed to maintain manufacturing. why? it's simply the bmw effect. they make highly engineered, perhaps overly engineered products, put a very high price on those, and as a result they have the highest level cost in
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the world and they're still engineering, manufacturing powerhouse. >> i want to put the cover of the "time" magazine issue up, because it's very clever. it's got a -- if you look at it one way, it says america is in decline and if you turn it upside down, it says no, america is still number one. the american dream. what's happening? >> it's very tough. the american dream is what you're talking about, the broad middle class. and i think we're never going to get back to that american dream. the dream of the 1950s, where some regular person without a lot of education could be a steelworker, buy a house, put his kids through college, that dream is gone. i think we will have to come up with a new american dream, very of the kind you were talking about. dynamic, mobile, flexible, entrepreneurial. you'll fall down a lot more often than you used to fall down in the old american dream.
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the key is having the skills to pick yourself up again. >> my son, i keep telling him that he should learn mandarin. he spends three days a week going to chorus classes. i don't think he has much of a future in singing and i said, you need to learn mandarin. he says, mandarin doesn't get you the girls. i think there are going to be more girls who speak mandarin than in his chorus class. >> tom friedman once said, the problem in -- in china, bill gates is britney spears. in america, britney spears is britney spears. >> good way to say it. come and spend more time with us, we of course like to watch your show, "gps" and, of course, pick up "time" magazine which has some great coverage from fareed on the changing world in which we all live. what can toilet paper, cheese and soda pop do for your investments? i have some very specific answers after the break. as low as 4.75% at lendingtree.com. plus, get the best deal or we'll pay you $1,000. call lending tree at... today.
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the economic recovery is not
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coming fast enough for many americans. belt tightening is still a reality. but one thing we don't cut back on consumer staples. you can live without designer shoes or a new set of golf clubs, but it's hard to cut corners on milk and toilet paper. you may want to look at investing in companies that sell consumer staples. our friend joins us now, ryan mack, joins us now. you have two picks. let's start with the consumer staples sector spdr, a brand name for a baskets of stocks that you can buy one thing like a stock, but it's like a mutual fund. the ticker is xlp. tell us about it. >> well, actually, it's a great investment for individuals looking for diversification. again, i love exchange-rated funds as opposed to going toward the individual stocks like colgate. get the entire basket of stocks
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and this is a market cap with over 50 billion. they have a lot of focus on these wider type investments, more established firms, firms around for a long time. they have a steady and stable cash flow. more of a defensive holding where as you said earlier, you might be able to live without the cars or certain things, but people buy the razors and the gillettes and colgates and that type of thing, but there's risks to individuals instead of the private or the larger companies they might want to go toward the generic. that's a risk that the companies are more established if individuals -- >> although we were showing the top five holdings. philip morris, coca cola, seems to hold its own and kraft foods. that's one of the etfs. exchange traded funds. you have another one you're suggesting. the ticket is kxi, it's the i shares s&p global consumer staples index fund. the difference here to me, sounds like it's global.
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>> that is the main difference. you go into a company like a nestle or the british american tobacco companies. these are companies you get a more global perspective. same various types of risks. market cap over 50 billion. slightly higher than xlp. this is .48 and should be looking for investing still great comparatively. >> right. compared to an actively managed mutual fund. but the performance of these two have been relatively similar. the first one was 8.7% one year. and this one is 9.6. >> yeah. again, they have had great returns. almost 90% corollated with the s&p 500 over the last 3 years and they get a good steady
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return. not the most exciting things in the world but if you're tired of the wild swings, this is what the consumer staples are all about. getting the boring, stable amount of return where you don't want a lot of risk involved in your portfolio. >> boring and stable is the new black. thanks so much for being with us. up next, i have got a very strong message for one fortune 500 ceo who had some very strong words for president obama. my xyz is next. [ male announcer ] how do you stop tacos falling over?
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time now for the xyz of it. last weekend "the financial times" published quotes of an interview of the ceo of george buckley of 3m. that's the company that makes scotch tape and post-it notes and other things that line the office desks and home shelves. buckley accused the obama administration of being, quote, anti-business calling the president's instincts robin hoodesque. he said that the politicians like president obama forget that
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big business has, and i quote again, a real choice between manufacturing in canada and mexico which he argued tend to be pro-business or america, which he inferred is not. now, that seems unusually inflammatory for a ceo, but i would like to discuss it more and get to the bottom of what he would like to see changed, so i invited him onto the show. his staff declined. after dropping the fighting words, it seems they're done talking about it and buckley seems to have disappeared since the article came out. as far as i can tell, he's not talking to any other media. is he right? the white house would disagree. the president's chief of staff comes from the world of business, corralled one of the greatest industrialists of our time to head blue chip ceos to create jobs. i have spoken to several major ceos saying this administration is particularly open to them and their concerns. so i'd like to know what buckley thinks of that. i don't see how in times like this it's responsible for the ceo of a major american corporation to lob a mortar over the trench and then retreat for
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